GDP growth a ‘conservative’ 2.8%

Exporters need to steel themselves as the strong rand is not going anywhere for the foreseeable future. The rand is expected to hold firm for at least another six months, says Nicola Weimar, senior economist with Nedbank. “It is very difficult to predict the trends at this stage but all indications are that the rand, which is no doubt overvalued at present, will hold firm. We are expecting a weakness towards the end of the year.” She said while this was good news for consumers the same could not be said for producers and exporters. “If you serve the entire pipeline of consumers then you will definitely benefit from this situation. It has also played a major role in containing the inflation rate.” Weimar said due to the strong rand South Africans had for example not felt any effect of global food prices shooting up. Economists for both Standard Bank and Nedbank remain conservative in their estimates of GDP growth. With Standard Bank projections around 2.9%, Weimar says that Nedbank is forecasting growth to be in the region of 2.8%, only slightly higher than the 2.7% of 2010. “The key factor is the world economy that still poses a lot of risk. The recovery definitely started to slow down towards the end of 2010, especially in Europe, which is still a significant export market for South Africa.” She said it was mainly due to the worries over Europe that growth margins were kept conservative at this stage.